Student Loan Debt:
Worse Than They Tell Us
By Jones William & D. S. Mitchell
There is a black cloud on the American economic horizon. Student loan debt has tripled over the last fifteen years. According to the Federal Reserve in the first quarter of 2018 student loan debt had ballooned to over $1.52 trillion and is expected to swell to $2 trillion by 2020. Forty four million Americans are carrying student loan debt, with about 7 million borrowers in loan default. The average student loan obligation exceeds $37,000. Forty per cent of borrowers are expected to fall behind on their loans by 2023.
Over the last forty years there has been unrelenting pressure on young people to go to college. Many of these students in the past would have been redirected to vocational programs, but apprentice programs like electricians, plumbers and equipment operators have been ignored for the promise of a college degree and the anticipated financial benefits of over $1.2 million dollars in increased lifetime earnings potential. A notable side effect of this move to “college for all” is, under the current system, a lifetime of debt.
Then And Now
College costs have outpaced the Consumer Price Index more than four fold since 1985. The availability of federally backed tuition assistance has made it relatively easy for students to pay for college, but leaving them with a life time debt burden. Things have changed dramatically. I graduated from college in 1972. I was the first member of my family to ever even try such folly. I did it in four years using a cluster of five ( yes, I said 5) small scholarships and a summer job. I left college with a degree in nursing and most important, no student loan debt. The growth of tuition costs relative to teen wages-in fact, all wages-has turned dramatically upwards and what I did would be almost impossible today.